The recently announced purchase of Sigma-Aldrich by German chemical and pharmaceutical company Merck KGaA (which is completely separate from the US Merck) for $17 billion will create a laboratory consumables giant, with annual sales of around €4.7 billion ($6 billion).

Merck intends to merge Sigma-Aldrich with its Merck Millipore laboratory consumables business. The two businesses are very similar in size, with Merck Millipore generating sales of €2.6 billion in 2013 and Sigma-Aldrich generating sales of €2.1 billion, and have very similar operations. Laboratory consumables is the largest sales division for both businesses, comprising analytical standards, chromatography chemicals, antibodies and molecular biology tools. Both businesses also possess a bio-/pharma production division, comprising growth media, bioreactors and chromatography and filtration products, although Merck’s is twice the size of Sigma-Aldrich’s, and an other industries division, which includes food and environmental testing.

The businesses have different geographical strengths, however, with Sigma-Aldrich stronger in the US and Merck Millipore stronger in Europe, and this was one of the main reasons for the acquisition. ‘Currently we are under-represented in the US and with the strong presence of Sigma-Aldrich in the US market we’ll have a size which really allows us to take products and service to the customer throughout this great country,’ says Karl-Ludwig Kley, chairman of the executive board at Merck KGaA. ‘Together we can team up in Asian countries and be very helpful to our customers there.’

The ability to take advantage of each other’s products and particularly of Sigma-Aldrich’s ecommerce platform was another driver, with the combined business boasting over 300,000 different products. ‘The combined company will be well-positioned to deliver significant customer benefits, including a broader, complementary range of products and capabilities, greater investment in breakthrough innovations, enhanced customer service, and a leading e-commerce and distribution platform in the industry,’ says Rakesh Sachdev, president and chief executive officer of Sigma-Aldrich.

Merck expects the acquisition to complete in mid-2015 and to achieve annual synergies of around €260 million after three years, but it asserts that it will continue to maintain a significant presence in St Louis, Missouri, where Sigma-Aldrich is currently headquartered.